APPELLATE COURT CASE NUMBER A-09-2223STATE OF MINNESOTA
IN COURT OF APPEALS
M/V Joseph L. Block;Indiana Harbor Steamship Co., LLCA foreign corporation; andCentral Marine Logistics, Inc.,A foreign corporation;Arcelor.mittal USA Inc.,a foreign corporation; andArcelmormittal Minorca Mine, Inc.,a foreign corporation;
Appellants,vs.
Daniel L. Willis,
Respondent/Plaintiffand
Duluth, Missabe and Iron RangeRailway Company, d/b/a CanadianNational Railway(CN), a foreignCorporation,
Respondent/Defendant.
REPLY BRIEF OF APPELLANTS TO RESPONSE BRIEF OF DM&IR RAILWAY COMPANY
Ray, Robinson, Carle & Davies P.L.L.Robert T. Coniam, OH0034623Sandra M. Kelly, OH0037008
Corporate Plaza II, Suite 3006480 Rockside Woods Blvd SouthCleveland, OH 44131-2222Telephone: 216-236-2400Facsimile: 216-236-2409Attorneys for Appellants
Johnson, Killen & SeilerJoseph Ferguson MN0134,806800 Wells Fargo Center230 West Superior StreetDuluth, MN 55802Telephone: 218-722-6331
Facsimile: 218-722-3031Attorney for Appellants
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Eckman, Strandness & Egan, P.A.Stephen S. Eckman MN25586319 Barry Avenue, SouthWayzata, MN 55391Telephone: 952-594-3600Facsimile: 952-594-3601Attorney for Respondent Plaintiff
Spence, Ricke, Sweeney &Gernes, P.A.Alfonse J. Cocchiarella MN157910Diane P.Gerth MN180786600 Degree of Honor Building325 Cedar StreetSt. Paul, MN 55101Telephone: 651-223-8000Facsimile: 651-223-8003Attorneys for Respondent DM&IR
Table of Contents
Page No.
Table of Authorities ii
Corrections to The Dock's Statement of Facts 1
Spoliation 3
The Apportionment of Fault 5
Appellants' Contribution Claim Against the Dock is Governed
by Maritime Law, not Minnesota State Law 6
The Maritime Warranty of Workmanlike Performance 7
Unitary Enterprise 8
There is No Principal - Agent Relation Between Minorca Mine
and the Remaining Three Appellants 12
Conclusion 13
Certificate of Service................................... ..14
Certificate of Compliance 15
Table of Authorities
Cases Page No.
Wajda v. Kingsbury, 652 N.W.2d 856 (Minn. App. 2002) .... 4
Dardeen v. Kuehling, 344 Ill. App. 3d 832, 801 N.E.2d960 (2003) 4
Kmetz v. Johnson, 261 Minn. 395, 403, 113 N.W.2d 96,101 (1962) 5
Vierling v. Celebrity Cruises, Inc., 339 F.3d 1309(11th Cir. 2003) 7
Sinkler v. Missouri Pacific R. Co., 356 US 326, 78S . Ct . 758 (1958) 8
Nerlund v. Schiavone, 250 Minn. 160, 165, 84 N.W.2d61, 65 (1957) 12
Foley v.Allard, 427 N.W.2d 647, 652 (Minn. 1988) 12
Dispatch Printing Co. v. National Bank of Commerce, 109Minn. 440,450,124 N.W. 236, 240, (1910) 12
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Corrections to The Dock's Statement of Facts
• At page 4 the dock implies that plaintiff willis was
required to wear an immobilizer for part of one day because he rode home
on a bus. The evidence is that he wore the immobilizer not just for the
bus ride, but continuously for nine days thereafter. He got home the
morning of Sunday, August 29, 2004. On Monday morning, August 30 he
called his family doctor, Dr. and got a same-day appointment.
willis continued to wear the immobilizer all of the 10 days from August
29, 2004 to September 8, 2004, due to his knee injury from his fallon the
dock. An ultrasound on September 8 revealed deep vein thrombosis due to
the immobilization. Willis was immediately hospitalized. (R. 721-731).
• At page 6 the Dock talks at length about why it couldn't
clean the dock. It ignores throughout the fact that it owned and operated
the dock, that vessels came on the dock's schedule, and that it was the
dock's mess left over from unloading the boat that preceded the M/V Block
on which plaintiff slipped.
• At page 7 the Dock states that its contract with Minorca
Mine allowed Minorca's "agents" to come to the dock to unload cargo, but
cites no contract language saying this. That's because there is none.
One of the central issues on this appeal is that there is no evidence that
Central Marine or Indiana Harbor or ArcelorMittal USA were Minorca's
"agents" under the DM&IR - Minorca Rail contract (Ex. 65).
• At page 8 the Dock states that Mr. testified to
the "interconnectedness" of the appellants. What the cited testimony (R.
198-199) actually says is that Mr. (amongst other things)
coordinates the transport of limestone to Minorca Mine to make taconite
pellets and coordinates the transport of taconite pellets from Minorca
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Mine to ArcelorMittal's steel mill in Indiana Harbor, Indiana. Such
coordination includes such things as telephone calls to Minorca Mine and
to DM&IR Dock regarding available dock space and how much stone there is
on hand "up there." If there is not enough space Minorca would refuse the
load of stone. (R. 262-63). Mr. also testified that Minorca
Mine gets its orders not from him, but from ArcelorMittal Mining Europe.
(R. 191).
• At page 9 the Dock falsely implies that Mr. does
not know which of the four appellants employs him. Mr.
testified, (R. 199-200), that he is not sure whether he is employed by
ArcelorMittal USA Inc. or ArcelorMittal Indiana Harbor, Inc. (not a party
to this action). At no point does he or anyone else try to establish that
he is employed by Minorca Mine, or by Central Marine, or by Indiana
Harbor.
• Contrary to the Dock's statement at page 9, all products
carried on the Indiana Harbor/Central Marine vessels do not "go to feed
the Minorca Mine." These vessels primarily carry raw materials to supply
the steel mill at Indiana Harbor, and also carry materials to and from
numerous other ports for third parties. (R. 183, 227, 683-84).
• At no point does Mr. say that "what the vessels
do" is "all for the benefit of the Minorca Mine", as the Dock claims,
Brief P.9. Mr. purpose is to keep ArcelorMittal USA Inc.'s
steel mills, including the mill in Indiana Harbor, supplied with raw
materials to make steel. (R. 174-75, 258). The dock would have the
Minorca pellet plant's tail wag the steel-mill dog.
• While appellants agree, Dock's brief page 8, that limestone
and taconite pellets are transported to the steel mill in Indiana Harbor
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in Central Marine's vessels, limestone and taconite pellets are also
transported to the Indiana Harbor steel mill - and other ArcelorMittal
steel mills- by virtually every commercial carrier on the Great Lakes,
including Interlake Steamship, American Steamship, Seaway Marine
Transport, Canada Steamship Lines, Lower Lakes Towing and Grand River
Navigation Company. (R. 183-84). Some of these carriers also carry
limestone to DM&IR dock in Duluth bound for the Minorca Mining pellet
plant in Virginia, Minnesota. (R. 218-219). Under the Dock's reasoning,
this would make these other carriers part of a unitary enterprise, and
agents of Minorca Mine.
1. Spoliation
The fact that taconite pellets had been present on the dock
for at least 12 hours before plaintiff fell is established by the
testimony of plaintiff that he felt pellets under his hands when he fell
and the testimony cited by the dock in footnote 2 that if in fact pellets
were there, they have to have been there for at least 12 hours.
The Dock states at the bottom of page 16 that, "at p. 14,
[Appellants] state," "Photos of the dock ... were proof that the spilled
pellets and limestone under the hopper were present. " This is false.
The statement actually made is at page 13 of appellants' brief, and
states, "Photos of the dock combined with crew member and dock worker
testimony, were proof that spilled pellets and limestone under the hopper
were present and unfortunately not an uncommon phenomenon."
While the dock spends eight pages arguing spoliation, nowhere
does it address the central issue: no spoliation instruction is proper
where appellants did not exclusively possess or control the dock.
Respondent Dock omits the word exclusive on page 13 of its brief when
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discussing possession and control despite appellants' correction of the
dock's misrepresentation at the charging conference on pages 7-8 of our
principal brief. Make no mistake - the law requires exclusive control and
possession in order to find spoliation. Wajda v. Kingsbury, 652 N.W.2d
856 (Minn. App. 2002). The respondent dock wishes to rewrite the standard
by omission. The dock used the improper instruction to argue that the
vessel defendants had hidden the evidence: "So I think - and that's part
of the instruction that the judge gave you. If one party prevents another
party from getting evidence in some fashion, whether by negligence or
whether directly, you're allowed to infer that that the evidence would not
have been favorable to that party." (R. 2024).
The spoliation instruction was improper and unfairly
prejudicial to appellants, as argued in our principal brief, pp. 7-16.
Minnesota law requires that the item spoiled must be critical
to the proof of the case. The dock's assertion that it could not defend
itself is not worthy under the law. Photographic, demonstrative or
testimonial evidence about a lost item in question cannot suffice in order
to find spoliation. Certain items must be critical to the proof of a case
because they are needed for testing to actually prove up a defect or other
pieces of the liability puzzle, like a defective care brake. For
instance, a sidewalk hole is not such an item of evidence since there are
many other ways to establish liability in such a case. Dardeen v.
Kuehling, 344 Ill. App. 3d 832, 801 N.E.2d 960 (2003). Dardeen is on
point here, the dock spillage, like a sidewalk hole, is capable of proof
through other means and one does not direct testing of it to establish
liability.
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There has never been an instance of a non-premises owner being
liable for spoliation upon another's premises. Appellants argued at the
charging conference that the present case is akin to slip and fall cases
in grocery stores. (R. 1979-80) For instance, the squashed grape requires
notice to the store owner which in part is based upon the condition of the
grape immediately after a fall. If the dock's position is viable, a slip
and fall claimant in a grocery store could be charged with a potential
spoliation claim if the grape was not preserved, although they did not
have exclusive possession of the premises. Here, Appellants were merely
invitees permitted to dock and unload cargo and by no stretch of the
imagination ever exercised exclusive control and possession of dock No. 6
under the law to properly impose spoliation upon them.
In reality the rule permitting an unfavorable inference to be
drawn is bottomed on the belief that, if the evidence had been produced,
it would have been unfavorable to the one having control over it. It is a
dangerous inference, which is why the law requires exclusive control and
possession. Kmetz v. Johnson, 261 Minn. 395, 403, 113 N.W.2d 96, 101
(1962). The wrongful application of this inference to the vessel
defendants was unfairly prejudicial and requires a new trial.
2. The Apportionment of Fault
The dock says it did not know plaintiff would be tying up near
the hopper (shiploader). It does not claim he should not have been there.
The dock has two rows of spiles for tying up vessels near the shiploader,
one row at the edge of the dock and the other row about 25 feet back from
the edge on the superstructure, one of which plaintiff used. (R. 1110-
1113j Photo, Ex. 227). Spillage is known to be the worst near the
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shiploader. (R. 489). There is no testimony that vessels ever call ahead
to tell the dock how they will tie up.
The Dock's discussion of apportionment glaringly leaves out
any discussion of the unfairly prejudicial effect of the spoliation
instruction, which is the principal reasonable explanation for why a dock
whose own rules require it to inspect and clean the dock between vessels,
but did not do so, was apportioned only 7 1/2% of the fault for this
accident.
3 . Appellants' Contribution Claim Against the Dock is Governed byMaritime Law, not Minnesota State law.
Appellants have no quibble with the Minnesota State law cited
regarding contribution, but it is accurate only for the negligence claim
made against it by plaintiff. At no point does the dock ever discuss the
legal principles governing the maritime nature of the tort contribution
claim made against it by appellants. The principal claims asserted
against appellants by plaintiff (Jones Act negligence, unseaworthiness,
and maintenance and cure) are all undisputedly maritime. Where the
principal claims are maritime, the tort contribution claim based on them
is also maritime, as set forth in appellants' principal brief at pp. 21-
22. The court's incorrect charge allowed the dock to argue (successfully
when combined with the erroneous spoliation instruction) that the law
required the vessel defendants to be aware of open and obvious conditions
(R. 2007), and that if the condition is open and obvious the dock is not
liable. This wrong standard was unfairly prejudicial to the vessel
defendants, and requires a new trial.
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6a. The Mari time Warranty of Workmanlike Performance
The Dock first argues, citing no cases, that the Rail
Transportation Contract (Ex. 65) between Minorca Mine and DM&IR dock
overrides the maritime WWLP. The Dock cites no cases for this bald
statement, and ignores appellants' argument in their principal brief,
pages 33-34, that under settled maritime law principles the WWLP may not
be displaced by the written contribution clause unless the written clause
expressly disclaims the WWLP. The Rail Contract's written clause (Ex. 65,
Sec. 13, p. 16 of 24) fails to do this. State law principles may not be
applied to vary this settled federal rule.
The Dock also argues, brief at 27, citing only the 1998 Knight
case, that the WWLP is "outdated." The dock ignores the most recent
federal circuit court opinion continuing to apply the WWLP in our context,
which was decided five years after Knight, see Vierling v. Celebrity
Cruises, Inc., 339 F.3d 1309 (11th Cir. 2003), discussed at pages 32-33 of
appellants' principal brief. Knight involved an injury at sea, where WWLP
indemnity normally does not apply. The Knight plaintiff was injured at
sea while he was helping transfer fish from his fishing vessel, the F/V
Endurance, to a factory ship that processes fish, the M/V Eiyo Maru. The
court refused to apply the WWLP and instead applied comparative fault
principles. While Knight does not say so, the reason is explained in
Vierling, 339 F.3d at 1317-18. Vierling, which involved an injury on a
dock, explained that the WWLP began life in Ryan Stevedoring as a warranty
by a maritime contractor to a vessel at a dock, not at sea. Vierling then
discussed an earlier Eleventh Circuit case that refused to apply the WWLP
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and explained that the refusal was because the injury occurred at sea.
Vierling then applied the WWLP to its dock injury, explaining that, "The
case at hand involves the typical pierside accident. It also involves
negligent conduct by a maritime contractor, an area where courts are
especially apt to apply indemnity." Id. At 1318.
The WWLP is a long established contract warranty unique to the
maritime law, which applies even in the absence of a contract, and does
not depend on the absence of comparative fault. It places responsibility
on dock owners who fail to keep their docks safe for seamen who come
there. It clearly applies here, and should be applied to require the dock
to indemnify appellants.
6b. Unitary Enterprise
At pages 32-33 the dock makes an amazing argument - that the
u.s. Supreme Court's decision in Sinkler v. Missouri Pacific R. Co., 356
U.S. 326 (1958) and its progeny do not "offer controlling precedent or
determinations of unitary enterprise." This is an amazing statement.
Sinkler is the source for the unitary enterprise doctrine, as discussed at
length in appellants' principal brief, pages 34-36. If Sinkler does not
state the controlling precedent, then there is none. This does perhaps
explain the dock's argument that this Court should ignore the Sinkler
requirements that there must be a written contract delegating "operational
activities" to some other entity before making that entity an agent of the
Jones Act employer.
The dock also supports its unitary enterprise argument by
citing to the testimony of Mr. which, according to the dock,
shows that Minorca Mine, Indiana Harbor and Central Marine are under the
complete control of Mr. This is wrong.
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What Mr. testified to is that ArcelorMittal is the
umbrella name for a global business. (R. 187-88) Mr. is
employed by ArcelorMittal USA as Manager - Marine Raw Material Logistics,
to feed this steel mill at Indiana Harbor and other mills with raw
materials needed to make steel. (R. 174-75, 258). This includes not only
waterborne transport, but some rail and truck transport as well. On the
waterborne side, he utilizes not only the three Indiana Harbor/Central
Marine vessels, but virtually all carriers on the Great Lakes, both
American and Canadian: Interlake Steamship, American Steamship Company,
Seaway Marine Transport, Canada Steamship Lines, Lower Lakes Towing and
Grand River Navigation. (R. 183-84). Four of the companies involved are
the four appellants: his employer ArcelorMittla USA Inc.; ArcelorMittal
Minorca Mine; and two non-ArcelorMittial companies, Indiana Harbor and
Central Marine. (R. 180- 82, 192).
One aspect of Mr. job is to coordinate
transportation of limestone to DM&IR dock in Duluth, so that Minorca Mine
can make taconite pellets, and transportation of taconite pellets from
DM&IR dock to the steel mill at Indiana Harbor (and other steel mills) to
make steel. (R. 198-99). This requires him to communicate regularly with
both Minorca Mine and DM&IR dock. He also communicates with Central
Marine Logistics on a daily basis. (R. 198, 207, 216, 263). He exercises
his authority through a "time charter", a long recognized maritime
contract under which ArcelorMittal USA "time charters," or leases, the
three Central Marine vessels. Under a time charter the charterer
(ArcelorMittal USA) has the authority to tell the vessel owner and manager
what ports to go to and what cargoes to load. The vessel owner and
manager retain the authority to manage the vessel on a day to day basis -
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they employ, hire, fire, and discipline the crew, schedule the crew and
administer labor contracts, purchase vessel supplies, and provide
engineering services - everything that is required in the vessel's day to
day management. The time charterer controls only where the vessel goes
and what it carries. (R. 184-85, 211, 223-38).
Mr. and ArcelorMittal USA also have time charters
with other fleets on the Great Lakes, specifically Interlake Steamship
Company and American Steamship Company each for one boat. (R. 185) Thus,
Central Marine vessels are not the only vessels delivering stone bound for
Minorca Mine to DM&IR dock.
Part of Central Marine's responsibility is to "nominate" boats
to make upcoming stone deliveries to DM&IR dock. If there is insufficient
room, the dock will refuse the boat. (R. 262). Not all stone cargoes
delivered to DM&IR dock are carried on Central Marine vessels. (R. 218-
19). There is also testimony from Central Marine's President,
that Central Marine also manages vessels not time chartered to
ArcelorMittal. (R. 1385-86).
It is important to keep in mind what the case law does and
does not say when considering what plaintiff is asking this court to do.
The Sinkler-Hopson - unitary enterprise theory of agency has been used
sparingly to find a principal and agent relationship between two entities.
Sinkler found that two entities - the railroad and a separate switching
company - were a "unitary enterprise". It did this to avoid the unfair
result of leaving the injured railroad worker with his only recourse
against a switching company that was not his employer. The "unitary
enterprise" construct saw to it that the railroad that employed him
remained liable for its employee's on-the-job injury. Here, plaintiff is
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asking this court to affirm its use to find such a relationship among four
entities - Minorca Mine, ArcelorMittal USA, Central Marine and Indiana
Harbor. This is error.
In this case, with no analysis, not two, but four separate
entities have been held to be a "unitary enterprise". This despite the
fact that the alleged negligent acts were committed by Central Marine's
own employees, not by some other entity to whom "operational duties" of
Central Marine were delegated. There is no precedent for such a holding.
Where "operational duties" of plaintiff's employer are not delegated,
Sinkler does not apply. Yet plaintiff encourages this court to go where
no court (save the trial court) has ever gone before, and find not two but
four companies to be a "unitary enterprise."
There is no case law holding that the existence of a time
charter establishes an agency under traditional agency principles, or a
"unitary enterprise" under Sinkler, which after all is a way to find an
agency in Jones Act cases where traditional principles fail. Nor has any
court held that the corporate relation of parent - subsidiary alone does
so. Sinkler required the existence of a written contract from the Jones
Act employer/principal delegating "operational activities" of the employer
to another entity before applying "unitary enterprise" to find an agency
existed. Here there is no such contract. Absent such proof there can be
no "unitary enterprise."
The trial court's decision that the four appellants
ArcelorMittal USA, Central Marine, Indiana Harbor and Minorca Mine were a
"unitary enterprise" was prejudicial error.
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6c There is No Principal - Agent Relation Between Minorca Mineand the Remaining Three Appellants.
Finally, without analyzing any facts, the Dock argues that
there is either an apparent agency or an agency by estoppel. It is
important to remember that, under the Rail Transport Contract (Ex. 65,
Sec. 13), what the dock must show is that Minorca Mine as principal held
out Indiana Harbor or Central Marine or ArcelorMittal USA as its agents,
and that the purported agent negligently caused plaintiff's fall. The
dock cannot do so.
Plaintiff ignores the black letter law that no one can become
the agent of another without the consent of the principal. Nerlund v.
Schiavone, 250 Minn. 160, 165, 84 N.W.2d 61, 65 (1957). Plaintiff also
ignores that apparent authority requires (1) that the principal (Minorca)
hold the agent out as having authority, (2) that the party dealing with
the agent must have actual knowledge that the agent is held out by the
principal as having authority, and (3) that the proof of the agent's
apparent authority must be found in the conduct of the principal, Foley v.
Allard, 427 N.W. 2d 647, 652 (Minn. 1988), and that agency by estoppel
arises only in cases where the principal, by its culpable negligence,
permits an agent to exercise powers not granted to him, and where equity
requires that the principal accept responsibility for the agent's
unauthorized actions. Dispatch Printing Co. v. National Bank of Commerce,
109 Minn. 440, 450, 124 N.W. 2d 236, 240 (1910).
None of these theories can be proven without some evidence
from the principal satisfying these elements. Here, the purported
principal is Minorca Mine. No one from Minorca Mine was deposed. No one
from Minorca Mine testified at trial. This fact alone should demonstrate
12
that this argument by the dock must fail. It certainly should demonstrate
that the elements of agency cannot be met here, and that none of the other
three appellants were acting as Minorca Mine's "agents" under the DM&IR
Dock - Minorca Mine written contract (Ex. 65, Sec. 13, p. 16 of 24). It
also explains why the dock makes no attempt to show specifically how the
elements of any agency theory are satisfied.
Conclusion
The trial court during the argument on appellants JMOL
certainly recognized the errors committed during this two week trial. The
court asked counsel for appellants how long a retrial on apportionment of
liability would take and that if he agreed with reapportionment "would it
not be the best solution to have a new trial on liability as to the dock
and the boat." (Proceedings of August 11, 2009, R.19,59) For the
foregoing reasons, appellants should prevail on their appeal, and this
case should be remanded to the trial court for further proceedings.
Robert T. Coniam (0034623-0H)Sandra M. Kelly (0037008-0H)Ray Robinson Carle & Davies PLL1717 E. 9th Street, Suite 1650Cleveland, OH 44114-2878216-861-4533
and
Joseph Ferguson (MN 0134,806)Johnson, Killen & Seiler800 Wells Fargo Center230 West Superior StreetDuluth, MN 55802218-722-6331
Attorneys for Vessel Defendants
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CERTIFICATE OF SERVICE
A true copy of the foregoing Reply Brief Appellants to Response
Brief of DM&IR Railway Company has been served on all parties this day
of May, 2010 by ordinary mail.
Robert T. Coniam (0034623 -OH)Sandra M. Kelly (0037008-0H)Ray Robinson Carle & Davies PLLCorporate Plaza II, Suite 3006480 Rockside Woods Blvd. SCleveland, OH 44131-2222216-236-2400
Attorneys for Vessel Defendants
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Certificate of Compliance
Pursuant to Rule 132.01 subd. 3, the undersigned hereby
certifies, as counsel for Appellants that this brief complies with the
type-volume limitation as there are 3,603 number of words of proportional
space type in this brief.
Robert T. Coniam (0034623-0H)Sandra M. Kelly (0037008-0H)Ray Robinson Carle & Davies PLLCorporate Plaza II, Suite 3006480 Rockside Woods Blvd. SCleveland, OH 44131-2222216-236-2400
Attorneys for Vessel Defendants
F:\USF:\USERS\DOTTIE\765 Daniel Willis\Reply Brief Dock 4.28.1 O.doc
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